What You Regret

Mr. Paul owns shares in Company A. During the past year he considered switching to stock in Company B, but he decided against it. He now finds out that he would have been better off by $1,200 if he had switched to the stock of Company B. Mr. George owned shares in Company B. During the past year he switched to stock in Company A. He now finds that he would have been better off by $1,200 if he had kept his stock in Company B. Who feels greater regret?

Because both Mr. Paul and Mr. George own shares of Company A and because they would have both been $1,200 richer if they had owned shares in Company B, they seem to be in exactly the same boat. But 92 percent of the respondents think Mr. George will feel worse than Mr. Paul. The key difference between them is that Mr. George regrets something he did, while Mr. Paul regrets something he failed to do. Most of us seem to share the intuition that we regret actions that don’t turn out well more than we regret failures to take actions that would have turned out well. This is sometimes referred to as omission bias, a bias to downplay omissions (failures to act) when we evaluate the consequences of our decisions.

However, recent evidence indicates that acts of commission are not always more salient than acts of omission. The omission bias undergoes a reversal with respect to decisions made in the more distant past. When asked about what they regret most in the last six months, people tend to identify actions that didn’t meet expectations. But when asked about what they regret most when they look back on their lives as a whole, people tend to identify failures to act. In the short run, we regret a bad educational choice, whereas in the long run, we regret a missed educational opportunity. In the short run, we regret a broken romance, whereas in the long run, we regret a missed romantic opportunity. So it seems that we don’t close the psychological door on the decisions we’ve made, and as time passes, what we’ve failed to do looms larger and larger.